THE LAND CONUNDRUM

As government’s financial woes continue to mount, public sector associations are unsympathetic to this plight and are pursuing their demand for a cost of living adjustment that now stands at 6.5 per cent.

Government’s efforts to issue a circular freezing all hiring and promotions may not be enough to deter calls for the salary adjustments. If anything, recent promotions in the security services make a mockery of the circular.

A collision course is almost certain, which is the last thing we need at a time the country should be focussed on creating more jobs as the economic situation looks set to get worse following regional and global trade and domestic developments.

One of the major developments that will most likely affect us is the recent move by our neighbours, South Africa, whose government has announced the expropriation of land without compensation. The first impact is the devaluation of the South African Rand to which the Lilangeni is pegged. This affects the cost of doing business in the country, making it more expensive for our cash strapped government to borrow money.

The move will slow business growth in a weak SA economy.

Hurting our pocketsWhere it will hurt our pocket is the decline in the trade receipts of the Southern Africa Customs Union (SACU), which funds over 60 per cent of the national budget.

Our share is already down by around E1.5 billion and we can’t afford to drop any further as our government, which is languishing in a precarious financial position, would not be able to service its debts or meet most of its financial obligations.

Consequently, more service providers would go unpaid for longer periods; forcing them to close and leaving more people unemployed. Ideally we should be taking advantage of the developments in SA to lure the weary white land owners to Eswatini with their businesses, but we may have long shut the door with Circular 1 of 2017.

This circular, issued by the Ministry of Natural Resources and Energy, bans non-Eswatini citizens from purchasing residential property in the country. The local business community, through the Federation of Swaziland Employers and Chamber of Commerce (FSE&CC) has called a meeting with the registrar of deeds later this month to discuss this ban on purchase of land by non-Eswatini citizens.

The meeting with the registrar is expected to address the validity of land purchases between 2005 and 2017, processes for exemptions and the potential impact on our investment climate, among other related issues.For a country that has struggled to lure investors over the past decade, the incentive for an investor to be able to settle in the country and own residential property is a must. Like South Africa, anti-property ownership restrictions have pushed this country down the property rights’ global rankings. According to the recently released 2018 International Property Rights Index on property rights, South Africa was previously ranked 27th overall and 1st in the African region. It has now declined by 0.65 from 7.00 in 2017 to 6.35 in 2018. “This is the largest decline by any country measured in the index. With the dramatic decline in its score, South Africa is now ranked 37th overall and second in the region (Africa) behind Rwanda,” reads the report.This plummet by SA does not make the Kingdom of Eswatini any better by the way. We are ranked 86th in the world and 10th in Africa. If it’s any consolation, in SADC we are less restrictive on land rights than Zimbabwe (117th), Madagascar (114th), Mozambique (105th), Malawi (97th) and Zambia (92nd). The negative investor confidence impact on such rankings is huge, given that property rights are a key indicator of economic success and political stability.

Weak property rights systemsIn the report, released this week by Property Rights Alliance, renowned economist Hernando De Soto said; “Weak property rights systems not only blind economies from realising the immense hidden capital of their entrepreneurs, but they withhold them from other benefits as evidenced through the powerful correlations in this year’s Index: human freedom, economic liberty, perception of corruption, civic activism, and even the ability to be connected to the internet, to name a few.”A South African political party, the Freedom Front Plus (FF+), members have come out to confess that the land they possess was obtained by concession from our ancestors. They now want to give it back to its rightful owners. However, even though the prospects of finally getting our land back from the Afrikaners look promising, as ignited by a visit to His Majesty the King by the FF+, we may need to put celebrations on hold for a while. The immediate challenge for us is how we address the impact of the land expropriation move by the SA government on our economy. Otherwise, the desired cost of living adjustment by public sector associations will serve as a source of conflict if rejected and a catalyst for financial ruin if granted.